Archive for October, 2005

Searching for Dividends in the Oil Patch

October 18, 2005


The Dividend Guy is looking for dividend payers in the Canadian energy sector and finds that apart from Enbridge (TSX: ENB) (which is really a utility), you need a microscope to find the puny dividends paid by the big oil companies. Check out the current dividend yields of some of the companies:

Petro-Canada: 0.40%
Imperial Oil: 0.90%
Shell Canada: 1.03%
Encana: 0.57%
Suncor: 0.38%

Pretty underwhelming, huh? Now, let us check out the yields and growth rates of some of the US-listed oil majors:

Exxon-Mobil: 2.1%
Royal Dutch Shell: 3.7%
Total SA: 3.2%
BP: 3.3%

From a yield perspective, US-listed energy companies might be a better buy.

Soaring Heating Bills? Not So Far

October 17, 2005


Inspired by a post in the Canadian Financial Stuff blog about skyrocketing home heating bills, I dug through my records to find out how natural gas prices have fluctuated over the past two years. Note that the data represents only the gas supply rate (in cents/M3) and not the Customer Charge, Delivery Charge or Gas Supply Charge billed by Enbridge (TSX: ENB).

[Chart showing Natural Gas Prices over past two years]

As you can see in the graph, gas prices have been fairly stable over the past two years. It is possible that the strength of the Canadian dollar, which has appreciated about 30% over the same period, has kept a lid on prices. However, January 2006 might be a different story.

Selling XIN; Buying EFA

October 15, 2005


I am selling the iUnits MSCI International Equity Index RSP Fund (TSX: XIN) and buying the equivalent iShares fund that track the MSCI EAFE Index. The XIN ETF has a total expense ratio of 0.5% versus 0.35% for the EFA and provides currency hedging for the extra fee. Since, I am investing for the very long term, I’ve decided to forgo the currency-hedging feature and save the small fee differential between the two ETFs.

It probably doesn’t make sense to sell the XIN and buy the EFA with the proceeds, but I am in the process of increasing my international equity exposure to my target levels. It would take a $20,000 investment in the EFA for a full year just to get back the commission involved in selling the XIN. And of course, there are the currency conversion charges on top of it. But, over ten or twenty years, I am hoping that the small savings will add up.